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PRINT THIS PAGE US venture capital investing in Q2 reaches highest level since Q4 200124/07/2006. Source: AltAssets. 
US venture capital investing in the second quarter of 2006 reached its highest point in four and a half years. A total of $6.73bn was directed to 619 deals, according to the Quarterly Venture Capital Report released by Ernst & Young and VentureOne. Overall the capital was five per cent higher than a year ago when it was $6.43bn, representing the most venture capital invested in a single quarter since Q4 of 2001 when $7.96bn were invested. Deal count increased three per cent from Q2 of 2005 (600 deals).
Stephen Harmston, director of global research at VentureOne, said, 'A plethora of very promising and innovative life science companies and a public market climate that is supporting, at least moderately, healthcare IPOs over the past two and a half years, is generating this strong level of investment activity. Thus, it is no surprise that health care investing, and in particular record-breaking investment in biopharmaceuticals, is surging ahead.
'Confidence in the market is also apparent in the level of current venture capital fundraising - in which some particularly large funds are readying for deployment,' Harmston continued.
Capital investment in healthcare companies increased 25 per cent over the same quarter last year, reaching $2.24bn in 160 rounds. The biopharmaceutical segment was the major driver of this with 80 deals and $1.45bn invested.
The alternative energy segment had deal flow triple from a year ago to 15 and investments reach $239.1m, a 290 per cent increase. The energy category as a whole reached its highest level on record with $354.4m invested in 25 deals.
The information technology segment, with a steady deal count (363 deals), saw its investment amount increase by two per cent from a year ago to $3.51bn.
Looking at the rounds, 38 per cent of the quarter's deals were later stage rounds, receiving 48 per cent of the capital. Seed and first round deals made up 33 per cent of the activity and 20 per cent of the investment this quarter. Second round deals represented 22 per cent of the deal flow and 23 per cent of the capital.
Copyright © 2006 AltAssets
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